Google announced an agreement that gives Yahoo! the ability to use Google’s search and contextual advertising technology through its AdSense™ for Search and AdSense for Content advertising programs.
“Under the terms of the agreement, Yahoo! will select the search term queries for which – and the pages on which – Yahoo! may offer Google paid search results. (…) Yahoo! believes that this agreement will enable the Company to better monetize Yahoo!’s search inventory in the United States and Canada. At current monetization rates, this is an approximately $800 million annual revenue opportunity. In the first 12 months following implementation, Yahoo! expects the agreement to generate an estimated $250 million to $450 million in incremental operating cash flow. The agreement will enhance Yahoo!’s ability to achieve its goal to grow operating cash flow significantly, while at the same time providing flexibility to continue to invest in ongoing initiatives such as algorithmic search innovation and search and display advertising platforms. It gives Yahoo! complete flexibility to continue to use its Panama paid search results.”
Why did we make this agreement? Quite simply, we think it is good for users, advertisers and publishers. By offering Google’s industry-leading technology to Yahoo!, the whole system becomes more efficient, and everyone benefits:
- Consumers will see more relevant ads when they are looking for information and browsing the web. And with interoperability between IM services, users will have easier access to even more of their contacts.
- Publishers currently in the Yahoo! Publisher Network will benefit from Google’s advertising technology, potentially increasing the revenue they earn from their sites.
- Advertisers will have new ways to reach their target customers online more efficiently.